Its call competition and freeing the market of controls something the Libertarian Party has been advocating for the last three years.

Building Land has been kept artificially high through restrictive planning, and the first time buyers kept out of the market by the property owning classes making thousands by doing no more work than listening to Gardners Question Time.

It is a pity that there is no joined up thinking in Government, as the FSA has just made it nigh on impossible to get a mortgage!

The Governor of the Bank Of England also now feels that the monopoly banks should be broken up. Again the LPUK was saying this from the momement Northern Rock failed. The Moral Hazard is that if you know you are going to be bailed out by the taxpayer who gives a flying fcuk about managing risk and insolvency.

18 comments:

Under the Westway
said...

Sounds to me as if it's going to be Our Friends In The North all over again - cheap jerry-built rabbit-hutches for the desperate, crammed together with no privacy and no security, in dodgy locations miles from established communities, the sink estates of the future.

Housing is expensive because of fractional reserve banking; because mortgages were too easy to get hold of; because of buy-to-let mortgages; and because of inflation at large.

Immigration played its part.

Lack of house building is low on the list of causes over the last 10+ years.

Remember Brown removed house prices from targeted inflation - superficially reducing inflation - so he allowed much lower interest rates than we would have had, it's been caused primarily by monetary policy.

We are one million houses short in this country- in 2008 at the top of the boom we were still building less housing than in 1931-32

Its been caused by restrictive 'planning'

And eight years of unrestricted immigration from Eastern Europe.

Never mine, a fourth term is about as likely as me being crowned Miss World.

Can't wait for the stamping of feet and wailing from the Righteous. I expect the following phrases in heavy use come May all delivered with a whine akin to a small child being told he can't have that new Playstation game:

We went from watching RPI inflation to RPI-X (excluding housing) in the latter years of the Conservative Government IIRC. Then we went fully to ignoring the biggest asset most of us would ever buy by adopting CPI for inflation purposes under Labour.

This was seen as 'best practice' by international finance quangos we were part of. Many major nations did the very same, hence why so many countries were in the same kind of trouble. The very nub of this economic stance is that debt is wealth. Gordon Brown believes it. He also has at his disposal the means to wipe away the debts he has incurred - taxation and inflation that will never trouble him.

Guthrum,

There are hundreds of thousands of properties stood empty and plenty of former industrial/business premises and land ripe for conversion. However, newbuild is where the money went and was what people wanted to buy. Buy to let was rampant too, and worse, jolly old taxpayer has been roped into paying peoples' rent for them because there aren't so many council houses any more. Families that wouldn't have fragmented 30 years ago because they couldn't afford to, now can because the taxpayer has been tapped up for a lot of money.

"No planning" would mean land being developed for the most financial gain.

Cheapest land is greenfield. This would vanish. Most lucrative market (pre-recession) is housing. The landscape would become a clutter of random dwellings all over the place, all with utility requirements and probably with septic tanks because of lack of sewer connection/capacity.

Then the value of housing land would plummet. Then you would see other developments - retail, employment land - popping up all over the place.

We would have a landscape like that of the US of A. No Green and Pleasant Land anymore.

We like to pretend that the land has some common link to us all. It does not. It is all owned by someone - farmers, investors, property developers. What the State did was to nationalise development rights. This is the least worst thing and prevents us being made serfs of all over again, at least in landscape terms.

There isn't really any monopoly. A landowner can sell to anyone he or she wants to. Visit any large housing development and it will be a patchwork of sites, often with multiple ownership, developers negotiating deals with landowners. This can be a problem for large developments which all need water and sewage.

The housebuilders tend to act in common interest, through housebuilders federations. Main target is always the local authority - knock their sites for being ineffective (local authorities land bank as well and will promote their own sites as ruthlessly as a private developer!)

For new builds, there is only a half-dozen or so basic house designs, despite all the tacky cladding, tiling and whatever else goes on to mask this fact. Some of the smaller housebuilders are more adventurous but they are also more expensive. New build housing design is notoriously crap.

And the local authority will dip its beak as well. They will take a percentage cut (on site delivery or cash payment) for "affordable housing" and other payments through Section 106 and Section 75 agreements for all sorts of things - education, outdoor play facilities etc. Of course, the homebuyer pays in the end, not the landowner and not the housebuilder.

pullik:Brown switched the inflation indicators in order to keep the economy ticking over (in debt), can't pin that one on the Tories: yes the excuse was that everyone else was doing it.

Guthrum: Temporary causes vs long-term causes. On this occasion I've gone for the temporary inflation-bubble cause because it's the single biggest reason in this last period. Immigration and the need for house building are two sides of the same coin, but those immigrants are now going home: now they will cause a housing SLUMP! Demand is falling, there are empty buildings coming on the market and being left there; if they build new houses there will be more empty buildings. I don't disagree that houses should be built and that planning is getting in the way, and I think that houses are massively overpriced, but they will fall now for some time, regardless of whether the planning situation changes, because there's simply no money to buy the damn things and fewer Poles who want to rent them.

Absolutely terrible news but not for me thank fuck. I sold up a couple of years ago all my properties in the UK that had thank you very much increased 1,000% from when I bought them, paid off the banks took the rest where it can't be touched and fucked the government for its new 18% capital gains tax.Trebles all round.

There are arguably enough houses and enough housing land, it just isn't where developers want to build or where people want to live. Also, local market variations based on demand.

How houses are planned for:

1. Take population projections and estimates for the next 20 years, for a regional area.

2. Work out how many new households will be created and throw in additional need and flexibility for existing need and demolitions.

3. Decide where to put them through the planning process, usually the general areas first then sites suggested by developers.

4. Developers submit planning applications for when they want to build houses.

Trouble with this...

a. Population projections. These are trend based, although variants can be considered. For a while it was assumed there would be a slump in average household size (more houses but less family housing) and reality this has been far less.

b. Planning process. This takes ages, 2 years to get through an inquiry even once sites are identified. Then throw in another year or so for the planning application.

You get the ridiculous situation where, in one local authority they are closing schools and not building houses and, in the next door local authority they are building houses and building new schools. All down to failure of joined up planning!

Pensions have been wrecked so people have speculated on housing (BTL) for retirement - this has added to the stampede for housing and is probably what has stopped house prices from falling into the abyss. Older people with no urgency to sell who are prepared to sit out the recession and wait for prices to reflate.

House prices are all artificially high - way above realistic earnings and determined far more by imaginative lending practices than real demand. All with the tacit approval of Government which knows that equity release is at the root of the previous boom. Brown wants a return to those heady 'feel good' days.

Immigrants on minimum wage don't add that much to the problem. Those not on minimum wage are probably the type we need (except those working for the state)

To be governed is to be watched, inspected, spied upon, directed, law-driven, numbered, regulated, enrolled, indoctrinated, preached at, controlled, checked, estimated, valued, censured, commanded, by creatures who have neither the right nor the wisdom nor the virtue to do so. To be governed is to be at every operation, at every transaction noted, registered, counted, taxed, stamped, measured, numbered, assessed, licensed, authorized, admonished, prevented, forbidden, reformed, corrected, punished. It is, under pretext of public utility, and in the name of the general interest, to be placed under contribution, drilled, fleeced, exploited, monopolized, extorted from, squeezed, hoaxed, robbed; then, at the slightest resistance, the first word of complaint, to be repressed, fined, vilified, harassed, hunted down, abused, clubbed, disarmed, bound, choked, imprisoned, judged, condemned, shot, deported, sacrificed, sold, betrayed; and to crown all, mocked, ridiculed, derided, outraged, dishonoured. That is government; that is it's justice; that is its morality.